Nikkei trading sharply higher as healthcare, resource stocks move up

By IBT Staff Reporter On 05/24/09 AT 9:58 PM

RTTNews - After opening slightly higher than its previous close, the Nikkei 225 benchmark of the Japanese stock market has moved up sharply on Monday, riding on some strong buying in healthcare and resource stocks.

With worries about U.S. budget deficit pulling down stocks from higher levels, cues from Wall Street are not any positive. However, betting on hopes of an economic recovery, investors in the Japanese market are seen picking up stocks this morning.

The Nikkei, which opened at 9,246, is currently trading at 9388, up 162.252 points over its previous close. The index had ended 38.34 points or 0.41% down at 9,226 on Friday.

Healthcare stock Shionogi is in focus following an announcement from the company that it will release a new influenza treatment by the end of 2010. The company is reportedly in the final stage of developing the treatment and will by the end of this year apply to the Health Ministry for approval to market the medication in Japan. The stock, a Nikkei 225 component, is currently up by over 7% at 1,977 yen.

Shares of other trading companies are in demand. Insurance and real estate issues are also seen trading firm. Textiles and communications stocks are exhibiting a mixed trend.

Among other markets in the Asia-Pacific region, Australia, Korea and Taiwan are trading higher. The stocks markets in Shanghai and New Zealand are exhibiting weakness.

In the currency market, the Yen is trading at 94.48 to the U.S. dollar.

Following a big increase in Chinese demand and on weak U.S. dollar, oil prices edged past $62 a barrel in early trading Monday.

Crude oil finished modestly higher amid choppy trading, adding to its strong week. Oil's hedge value was boosted as the dollar continued to fall against other majors. Light sweet crude for July delivery moved to $61.67, up 62 cents on the session. Oil had jumped to around $62 a barrel earlier in the day.

On Wall Street, stocks faced some selling pressure during the final minutes on Friday on worries about the budget deficit. The Dow ended 14.81 points down at 8,277.32 and the Nasdaq closed 3.24 points down at 1,692.01. The S&P 500 fell marginally by 1.33 points to 887.

Stock markets across the Asia-Pacific region finished lower on Friday. Major European markets, however, closed modestly higher. The French CAC 40 Index and the German DAX Index both finished higher by 0.3 percent. The U.K.'s FTSE 100 Index also closed mildly higher, rising by 0.4 percent.